leg shape, fuller loins and enhanced shoulder muscling). This requires
crossing with terminal sires.
Guides of Good Practice
Commercial Marketing
SUMMARY
This is one of a series of Guides of Good Practice which have been
produced to help commoners in dealing with key issues. All comments
are welcome.
1. Livestock production across the country has been in decline
for many years. This was hastened by FMD, but livestock markets
have since recovered, especially in the main livestock farming
areas, such as Cumbria.
2. Direct niche marketing probably accounts for 1-4% of total
UK sheep output. It is important to those involved, and is likely to
grow steadily. However, it is unlikely to provide the main market
demand, in the foreseeable future. The Federation has produced
another Guide on Direct Marketing through farm shops, farmers'
markets and direct marketing initiatives.
3. The export market accounts for about 45% of hill lambs in
the UK and is likely to be of growing importance. Exports have
increased dramatically in recent years and the immediate outlook
is favourable. This has been caused by production problems in
southern Europe (eg blue tongue disease and dry summers) and a
devaluing trend for sterling against the Euro.
North European markets (mainly to France) account for over 90% on a
weight basis of UK sheep exports. These markets take lambs at 38-44
kg and require lean carcasses with enhanced conformation (ie rounder
South European markets are still relatively small in terms of tonnage.
But they are important because they take light lambs (20-38 kg
liveweight) and therefore provide a good market for pure hill lambs.
4. The retail home market accounts for about 20% of hill lambs
in the UK.
After FMD, many major retailers introduced a range of products
designed to generate demand for hill lambs. Some continue to operate
these schemes. All retailers require high quality lamb, usually with
carcasses of 16-21 kg deadweight. These schemes are often linked to
Welsh lamb, which has a strong brand identity. However there has
been some overspill demand for other hill lamb.
The full Guide contains details of contacts for the main retailers and
their slaughterers. Independent butchers supply about 25-30% of lamb.
Tescos (19% of market share) and Sainsbury's (14%) continue to offer
Welsh mountain lamb. ASDA (14%) also buys hill lambs direct. Other
supermarkets also have schemes.
5. The UK Muslim community probably accounts for over 25%
of sheep meat produced in the UK and demand from ethnic
communities is increasing.
Much of the ethnic market has been sourced from cull ewes, although
a wide range of carcasses are accepted. Auction market is the preferred
route for the buyers and agents who work on behalf of the companies
slaughtering for the Ethnic market. There is also a small, but rapidly
growing demand for quality meat. Hill sheep are ideally suited to
satisfy the ethnic market.
The demand from the UK ethnic market is steady throughout the year.
However the annual Muslim festival of Eid al Adha (often known as
Ramadan) causes a surge in demand and offers a major opportunity for
sheep farmers. The festival is celebrated on varying dates every year,
according to the Lunar calendar (it will be in Jan/Dec iin the next few
years. Purchasing activity should increase ten days prior to the festival.
6. If selling liveweight through an auction is your preferred
route, make sure that your auction has a good portfolio of buyers
and can deal with all classes and standards of stock. Auctions
should carry credit insurance on all buyers. There are a number of
important tips, which apply especially to auction selling but can be
applied to all types of marketing.
Batch sheep evenly for size and type, many buyers are size and
quality specific. Batching sheep into as level a parcel as possible will
maximise potential when selling through live auction. Rams should be
sold separately from whethers. Ensure sheep are clean. Dirty sheep
are a source of contamination during slaughter and may result in
financial penalties, in addition to fetching lower prices.
Plan your marketing to match peak demand periods associated with
Christmas, Easter and Eid al Adha. Utilise pricing information,
which is widely available through agricultural publications and via the
Internet. Seasonal trends are often similar although the prices may
increase or decrease depending on market forces. Understand the
costs of marketing, including your own time and the real costs of
transport.
7. Direct purchasing on a deadweight basis by processors has
been on the increase over the last 20 years. Many farmers are
reluctant to sell deadweight and sheep selling does lend itself more
readily to the live auction. The following are the opportunities for
direct selling;
Contacting an abattoir direct should prompt a visit by a
representative who views the stock and explains the pricing and
payment terms. The seller must be comfortable with the buyer, be sure
of the their financial stability, and be confident he understands the
deal. Price will usually be quoted as p/kg dressed carcass weight.
There will be additions and subtractions according to carcass
confirmation and fat cover. In some instances it may be possible to
negotiate a one off price for a parcel of sheep.
If you are not fully comfortable with a direct contract, you can work
through a livestock marketing company or individual agent. These
will have supply arrangements with meat companies. Pricing
arrangements will be similar to direct routes. Some auctions offer a
deadweight service to clients, similar to marketing companies and
agents. The service may also include acting as a collection centre.
Many farmers view dead weight selling as high-risk. This can stem
from bitter experience or fear of the unknown. By and large dealing
with reputable companies should alleviate farmers' fears. All the
issues such as carcass dressing, classification and payment, should be
part of open discussion between the buyer or buyers agent. Using
auction market as the broker between buyer and seller is an acceptable
way of protecting your interests.
8. Cooperation with other farmers may well bring benefits,
especially when marketing lambs.
Economies of scale and coordinating selling times may make buying
sheep from a farmers group a more attractive prospect for a purchaser.
It also places farmers in a stronger negotiating position and can help
them share staff, knowledge and equipment. Commoners could
cooperate in their marketing
9. Farm Assurance is an important tool for sheep marketing,
designed to give consumer’s confidence in British meat productions
and auctioneers are reporting 5-10p/kg penalties for lambs not certified
whichever route to the market is taken.
10. There are various schemes to try to improve lamb marketing.
According to EBLEX, only 60% of finished lambs meet the
average buyers specifications.
EBLEX run a “Better Returns Programme”. English Farming and
Food Partnerships (EFFP) has been set up to develop areas of mutual
benefit between farmers and the food industry. Breeding improvement
strategies with terminal sires have made tremendous strides in
improving the growth rate and carcase conformation. For hill sheep,
breeding improvement has taken longer to develop, but there are now
initiatives for most breeds. The Northern Upland Sheep Strategy
(NUSS) runs a nationwide scheme promoting flock improvement.